14 August 2017
New research from The Equity Release Council shows that borrowers withdrew over £700 million from their properties in Q2, the highest amount over any quarter recorded by them since 2002. With such a large sum of capital being released, it begs the question, what are borrowers using the capital for?
Recent studies by Saga Equity Release Advice Service shows the main reason homeowners are releasing equity from their property is to perform home improvements, with two thirds of people spending approximately £13,000 on this. This can be to make later life more manageable and to help avoid the need to downsize to a smaller property.
Research conducted by more 2 life has found that the most popular reason retirees gave for not wanting to downsize their property was due to the emotional ties they have to the family home. Not wanting to leave a property that has many years of happy memories is an understandable reason to stay, along with further reasons such as not wanting to incur moving costs and potentially higher stamp duty fees. Instead of the upheaval of downsizing a property in later life, equity release is giving homeowners more freedom to stay in their property and have the capital to make the changes they may want or need to make their home life more enjoyable.
Equity release capital is also being used by some borrowers as a rainy-day fund to help with any unexpected costs that may come to light which pensions may not cover. For borrowers who are living on a fixed income, having a reserve can be beneficial and will give them peace of mind for the future.
The Saga Equity Release Advice Service research also showed that borrowers are also gifting capital to family members, with the average amount standing at £33,000, an increase of over a quarter since 2012. Previous data has suggested that these monetary gifts can be to help younger family members with mortgage deposits, giving them a boost on to the property ladder.
If you are looking to obtain an equity release qualification in order to help homeowners get the most out of their properties, then get in touch with Simply Academy for further information on our CeRER courses. You can get in touch with our friendly student support team on 01279 874 430 or alternatively visit our financial advisor training courses page for more details. We look forward to helping you reach your career goals.
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